October 09, 2008

Iceland on the Cheap

Friend of IT Andrew Evans spent some serious time in Iceland while researching his book - he's the author of the Bradt Travel Guide to the country - and he says that with the recent economic downturn, now might be the best time to go. Andrew sent along some pictures that his partner, Brian Gratwicke, took while exploring the region, and after viewing them, we're about ready to book our flights...

Ever dreamt of visiting Iceland but were scared of Scandinavian prices? Well, now is the time to head north. In the midst of the worldwide financial crisis, tiny Iceland has been one of the hardest hit. This past week, Iceland’s central bank stopped pegging its currency to the Euro, leading to rapid devaluation of the Icelandic krona. This is devastating for Icelanders, of course, but for anyone who craves pristine lava landscapes or bathing in natural hot springs—your moment has come.

Among seasoned travelers, Iceland is notorious for being an outrageously expensive destination. Basic travel amenities like food, rental cars, and hotels typically cost double or triple the price of the same in North America and even Europe. To give you some idea of how expensive it is, The Economist ranked Iceland number one on their global Big Mac Index: the per-capita-real cost of a McDonald’s hamburger.

Last year, the US dollar was worth about 60 Icelandic krona. This week the exchange rate jumped to 110 krona to the dollar. That basically means that buying a hot dog in Reykjavík is cheaper than getting one in Central Park. Until real prices are readjusted, traveling in Iceland will cost roughly half of what it normally has. That still doesn’t make Iceland cheap, but it does make it a heckuva lot more affordable to the average American traveler. What’s more, now there’s a European country that actually wants American dollars!

So how is Iceland in October? Gorgeous and still not too cold. Of course, the broader question here is how the current economic crisis will continue to affect global travel trends. As major markets in Asia, Europe, and the Middle East struggle with uncertainty, our concept of affordable and accessible destinations is likely to shift even more dramatically—especially if your travel budget is tied up on Wall Street.

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I got to Iceland thanks to a [free] stop over on Iceland Air on my way back from Europe. Thank god I was only there for 24 hours because I was astonished by how incredibly expensive it was (yet still awesome). That new exchange rate is incredible.